West Coast Capital (WCC) the private equity partnership, owners of Winchburgh Developments Limited, agreed a joint venture with CALA Homes to take forward the development.
The scheme is one of the UK's biggest housing-linked infrastructure projects, and is expected to boost the Scottish economy by £1 billion over 15 to 20 years.
West Lothian's Executive Councillor for Education, David Dodds, said: "We are delighted to have reached a deal with the Scottish Government and Winchburgh Development Ltd that supports the plans to expand Winchburgh.
"Winchburgh represents the right development in the right place and will help meet the demand for people looking to find a home for their family or business in West Lothian, which is one of the fastest growing areas in Scotland.
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"Key to the development is the delivery of new state-of-the-art schools for Winchburgh in the council's largest ever single capital investment. West Lothian already has one of the best school estates in the country, giving a platform to help our young people achieve their full potential and support life-long learning for the whole community."
The Scottish Government's Building Scotland Fund will provide a £26.8 million loan to assist the development as part of a support package agreed under the Edinburgh and South East Scotland City Region Deal.
Meeting the developers, West Lothian Council and other stakeholders at the Winchburgh site, Finance Secretary Derek Mackay said: "As we support the continued growth of the Scottish economy, developments like Winchburgh are crucial. I am pleased the Building Scotland Fund, has been able to support this development; to unlock the construction of 3,450 new homes and the infrastructure required to make Winchburgh a reality.
"The Winchburgh development is a leading example of a joined up approach between the private sector, government and local council. It will help stimulate the economy and bring new homes, schools, transport and community facilities to the area.
"As well as being great for wider economic development, over 700 affordable houses, including 400 for social rent, will be built as part of the development which is excellent news for the region."
(CM/JG)
